GoPro, Inc. reported a 40 percent loss in its third quarter earnings today. The wearable camera maker’s sales dropped to $240.5 million from $400 million in 2015. On Thursday, the company’s stock price fell to $11.94 per share, a sharp plunge from $17.15 per share back in September. During the GoPro earnings call, CEO Nick Woodman put the blame of the poor third quarter sales on production issues with Hero 5 and Karma drone.
Shareholders have given up on the promise of a hopeful GoPro Q3 earnings report back in early October. During that period, specifically 21 trading days, the stock plunged nearly 30 percent.
GoPro shares have taken a disgraceful 88% fall from their 2014 high, and down more than 20% in after-hours trading. A year earlier, GoPro earnings report read a Q3 profit of $18.8 million, or 13 cents per share.
GoPro’s revenue and profit missed all analyst forecasts by a wide margin. According to a survey by FactSet, analysts estimated per-share loss of 51 cents a share, and revenue of $308 million.
GoPro, is known for its resilient line of action cameras. Chief Nick Woodman is placing huge bets on the newest cameras, Hero 5 and Karma Drone, which started selling in October. The Karma is the company’s first drone. Both the gadgets can, “can have a fundamental shift in momentum and trajectory of our business,” he said. GoPro has lowered its sales target for the year, reflecting a weak holiday season. The company is reiterating from what it first believed, “a quarter where we [GoPro] expect to return to profitability”. It doesn’t look like the losses are temporary. GoPro expects to record a net loss in 2017.
Weak Holiday Season
Wearable device maker Fitbit, Inc., is also expecting lower revenue for the holiday quarter by as much as 25% attributing to a weak holiday season.
For the past few months, GoPro has been heavily investing in its new products. During its third quarter, GoPro shipped 1.02 million devices, a 36% sharp plunge from 1.59 million a year ago.
The sales of its new cameras are not as rosy as expected. GoPro temporarily halted the sale on Amazon in mid-October, while it negotiated pricing with the Seattle-based e-tailer. A company spokeswoman said the company has now resumed selling its cameras on Amazon.
Trouble Meeting Demands, Aspirations & More…
The shipments of its newest devices were delayed during the quarter as GoPro was unable to meet up the demands. Currently, GoPro is under a lot of pressure to go beyond the camera market. It’s desperately trying to enter the mainstream market. However, it faces competition from giants like Samsung and Apple.
In an interview with TechCrunch, Woodman told he aspired to turn GoPro into a lifestyle media company. But, it seems those plans are on hold as the company expects “2017 to be more of an evolutionary year, rather than a revolutionary year.” For 2017, GoPro expects to cut non-GAAP operating expenses down to $650 million and return to profitability.
For now, GoPro is shouldering adversity, failure and hardships. Let’s hope these unique experiences help GoPro come out on the strong side in 2017.